Senator Amy Klobuchar

Working for the People of Minnesota

Press Contact

Joel Gross
Press Secretary
(202) 224-3244

News Releases

Klobuchar Fights to Curb Subprime Housing Crisis

Votes for Federal Housing Administration overhaul to curtail mortgage woes

December 14, 2007

Washington, D.C. – U.S. Senator Amy Klobuchar voted today in favor of the Federal Housing Administration Modernization Bill to help families all over the country currently struggling to keep their homes. The measure, which passed in the Senate today by a vote of  93-1,  would increase FHA loan limits, reduce the agency’s down payment requirements to allow more families to qualify for these secure loans, and make more counseling available to homeowners.

“This legislation puts important protections in place to help safeguard families from predatory lending practices,” said Klobuchar. “As the nation struggles to deal with the fallout from subprime lending, it is critical that we have a strong agency that can provide families with safe, fair, and affordable mortgages.  I will continue to fight for additional reforms to protect borrowers, such as ensuring that important borrower protections – like those we have in Minnesota – become law to help families across the nation.”

Senator Klobuchar a co-sponsor of the “Homeownership Preservation and Protection Act of 2007,” which would stop abuses in the subprime lending industry, help stabilize the battered mortgage market, and protect the homes and home equity of American families.  Klobuchar is also a cosponsor of the “Borrower’s Protection Act,” that requires mortgage brokers and lenders to protect consumers from predatory lending practices.  Many of the provisions in this bill mirror the tough consumer protection legislation enacted in Minnesota this past year.

Summary of the Senate Passed Federal Housing Administration Modernization Bill:

- The Senate Federal Housing Administration Measure Encourages More Families to Take Safe FHA Loans. The measure increases a homeowner’s ability to qualify for a safe and secure FHA backed loan. The measure increase the FHA’s loan limits for single families to 100 percent of the median home price in an area, up from 95 percent. In addition the measure reduces the FHA’s down payment requirements from three to 1.5 percent.

- The Senate Federal Housing Administration Measure Expands Counseling Services to Help Families Stay in Their Homes. The measure authorizes $200 million for foreclosure-prevention counseling for low- and moderate-income homeowners who are having trouble making their mortgage payments. The measure also establishes a pilot program to examine alternative automated credit rating systems for borrowers who have a history of making required payments in a timely fashion but have not established a sufficient record with a traditional credit bureau. In addition, the bill Senate passed requires the Secretary of HUD and the FHA Commissioner to work with industry, the Neighborhood Reinvestment Corporation, and other non-profits to improve the FHA loss mitigation process so that more troubled homeowners can retain their homes.

- The Senate Federal Housing Administration Measure Enhances the FHA’s Fraud Protection Authority. The Senate passed measure enhances the FHA’s ability to detect and prevent fraud and increases penalties for committing fraud against the agency.

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Senator Klobuchar’s Offices

302 Hart Senate Office Building
Washington, DC 20510
Main Line: 202-224-3244
Main Fax: 202-228-2186
Toll Free: 1-888-224-9043

1200 Washington Avenue South, Suite 250
Minneapolis, MN 55415
Main Line: 612-727-5220
Main Fax: 612-727-5223
Toll Free: 1-888-224-9043

1134 7th Street NW
Rochester, MN 55901
Main Line: 507-288-5321
Fax: 507-288-2922

121 4th Street South
Moorhead, MN 56560
Main Line: 218-287-2219
Fax: 218-287-2930

Olcott Plaza, Suite 105
820 9th Street North
Virginia, MN 55792
Main Line: 218-741-9690
Fax: 218-741-3692